Driving business value with ESG data readiness

Customers from many industries have been reaching out to us to discuss how they can move beyond their environmental, social, and governance (ESG) reporting, to where they can also spot opportunities to drive sustainability progress and reduce carbon across their value chains. At Microsoft, we’ve been tackling related questions for nearly two decades, and in 2020 we committed to becoming carbon negative, zero waste, and water positive, and to protecting more land than we use. We share our successes and setbacks annually in our Environmental Sustainability Report.

Now, we’re sharing additional learnings—from our efforts and those of our global ecosystem of partners and customers, and from advice we’ve received from external sustainability experts—in the Leader’s Guide to Sustainable Business Transformation. The guide offers practical tips to help business leaders consider what steps can help their organizations build a culture and infrastructure around ESG data, and provides context for taking the Microsoft ESG Data Readiness Assessment.

For quick examples of industry-specific considerations addressed in the guide, see the chart below.

Leveraging the Leader’s Guide

When we began our own sustainability journey, we learned that to make progress on our ESG goals we had to bring sustainability out of siloed reporting efforts and into the core of our business. The Leader’s Guide discusses approaches to this operational shift, including ways to facilitate cross-functional conversations within your organization around the value of harnessing ESG data.

The guide also shows how Microsoft customers in different industries are using sustainability solutions to transform their operations. For example, international forestry group Södra had been limited to a labor-intensive process—siloed within its sustainability unit—to answer routine inquiries about its environmental data. Since collaborating to adopt Microsoft Sustainability Manager in 2023, Södra’s IT and sustainability teams have been generating significant insights for stakeholders, including the organization’s estimate that its positive climate impact is equal to about one-fifth of Sweden’s reported carbon dioxide emissions.

We’re ready to partner with your organization so you can also use ESG data to uncover operational insights to support your sustainability progress.

How ESG data supports business resilience

As organizations worldwide try to predict and prepare for emerging ESG disclosure requirements, they also need to respond to expanding market expectations. Investors, consumers, and shareholders are tracking companies’ sustainability commitments, and they’re looking for products and solutions that champion those commitments.

Our customer King Steel, a Taiwan-based global shoe manufacturer, faced this situation when major brands like Nike and Adidas began expecting sustainable and recyclable products. To align with its customers, King Steel started collecting and digitizing its ESG data using Dynamics 365 and capabilities within Microsoft Cloud for Sustainability. This shift to a digitized data estate not only enabled King Steel to deliver transparent data to demanding customers, it also helped the company uncover insights into materials and operations that resulted in more sustainable production, reduction of waste, and innovation of new customizable products.

By implementing a robust ESG data infrastructure, your organization can also respond to sustainability-driven market demands with speed and insights.

From commitments to solutions

Early in our journey, we quickly realized our environmental commitments necessitated better tools to manage the increasing number, size, and complexity of our ESG datasets. We also needed to unify siloed data and ensure traceability and transparency—to execute our plan to publicly self-disclose our ESG progress, and to prepare for the evolution of sustainability reporting requirements. Simultaneously, we wanted to use our ESG data to identify opportunities to drive sustainability efficiencies and business growth.

This led us to Microsoft Fabric and AI tools built on Microsoft Azure. By adopting these capabilities, we’ve now integrated our ESG, operational, and financial data, empowering our employees to access timely data intelligence so they can contribute ideas and innovate.

But to meet our ambitious sustainability commitments, we must also drive change across our value chain. In 2023, we estimated that 75% or more of our carbon footprint was coming from indirect, or Scope 3 emissions, which organizations accrue from suppliers. To address this, the Microsoft Procurement team needed customized ESG inquiries, granular data, and flexible, collaborative reporting. The team partnered with Microsoft engineers to add new capabilities to our data technologies, including low-code customization and self-service features to help our value-chain partners find ways to reduce their environmental impact.

Then we carried these robust solutions forward to our customers, so organizations like US farming powerhouse Land O’Lakes can access their ESG data for day-to-day decision-making. For example, the company relies on Azure Data Manager for Agriculture to collect and unify data on weather, soil, and irrigation—freeing Land O’Lakes data scientists to help optimize planting decisions. The Azure-based ESG data infrastructure also boosts the Land O’Lakes competitive stance by providing consumers with visibility into the organization’s farming practices and environmental outcomes.

Exploring industry-specific considerations

With the right tools, ESG data can support each industry’s unique set of goals, challenges, and opportunities.

Here’s a look at some of the issues our Leader’s Guide and ESG Assessment can help you start exploring:

Visit the Leader’s Guide for in-depth information and resources.

Next steps

As you rethink operations to support your organization’s sustainability progress, we’re ready to share our learnings and continuous innovation to help advance your ESG priorities, accelerate your growth, and partner for a shared sustainable future.